x
OTT

The Value of Mobile Video

Growing adoption of wireless dongles (aircards) and smartphones are driving growth in video consumption on wireless networks. At least anecdotally, wireless providers seem to face a greater challenge with access bandwidth than wireline providers. (See OTT Video: Service Providers Face a Gathering Storm.) As a result, wireless networks could face congestion at a lower level of video traffic, and need to find a solution more urgently.

From an operator's standpoint, there are three approaches to traffic congestion: Manage the bandwidth available more efficiently, absorb the investment in expanding capacity, or create new sources of revenue to subsidize network investment. These are not exclusive approaches; in fact, operators would be well advised to explore all options.

Heavy Reading will shortly be conducting a survey of mobile operators around the world, to gather insight into the attitudes, strategies, and priorities for mobile video traffic management.

Traffic management solutions such as deep packet inspection (DPI) and policy tools, caching solutions, differentiated charging and billing, and of course network upgrades, are being implemented by both wireless and wireline operators. In addition, mobile operators are looking at offloading traffic to WiFi or other access options, expanding backhaul capacity, and adapting video streams for mobile viewing.

But wireless operators seem less focused on potential revenue opportunities related to video delivery. This is particularly true of revenue-sharing models with content owners or online distributors, as opposed to charging consumers for a premium service or improved connectivity.

There is an obvious reason for this. Few operators, wireless or wireline, are able to establish the relationships with content owners and drive revenue-sharing deals anywhere in the world today. This is unlikely to change in the short term. However, mobile operators have an opportunity to engage with the mobile video value chain at a relatively early stage in its evolution, and develop relationships over the coming years. By contrast, the value chain for online video is already quite well established, and wireline operators have largely been left out.

Mobile video revenue is not going to amount to much today, but as the market grows, service providers will be able to benefit from revenue-sharing deals. Online video revenue overall is fairly low as well, but more than doubled from $324 million in 2007 to $734 million in 2008, according to the Interactive Advertising Bureau (IAB) . As mobile video audiences grow, advertising dollars will find their way to mobile as well.

Advertisers will face a number of challenges on the mobile device, particularly in finding the right ad formats for mobile. It's definitely a space that will evolve over time. But if it does so without operator involvement, they will struggle to insert themselves into a mature, established value chain.

— Aditya Kishore, Senior Analyst, Heavy Reading

DCITDave 12/5/2012 | 4:37:39 PM
re: The Value of Mobile Video

As mobile devices grow larger with more screen real estate, isn't it true that mobile video is simply online video accessed on the go?


It seems one of the only ways mobile operators have of making revenue from video consumption is via higher and higher data access charges (which also can be mitigated thanks to the growing number of WiFi hotspots).


Indeed, one of the big reasons I won't pay for MobiTV or Flo TV is that YouTube via WiFi on an iPhone or iPod is pretty good -- good enough for most things, most of the time.


If I were a mobile operator, I'd be worried.

HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE